Cemig talks divestment, bond issue

Cemig talks divestment, bond issue

Brazil Bonds

Brazil's Cemig has announced plans to sell 10 assets worth BRL6.56bn ($2.02bn), according to a securities filing. The power company plans to raise at least BRL3.28bn by Q1 2018 in order to reestablish financial equilibrium.  

The announcement comes after Cemig held investor meetings in Europe and the US for a potential $1bn bond sale. Investors highlighted the need for more clarity at the time on the firm's divestiture plans, one debt capital markets banker said.   

Cemig could potentially raise $1bn in cross-border bonds in July, after the company delayed plans last month.

The company is also considering the European bond market, but the same DCM source said Cemig was likely to get better terms on cross-currency swaps back to reais if it did dollar bond.  

The company, absent from the cross-border bond market since the 90s, got board approval to issue up to $1bn in seven-year bonds through subsidiary Cemig GT.

Bradesco, Citi, Deutsche Bank and Itau BBA led the company's investor meetings last month.